In our first post in this series, we introduced the concept of AI in lending and examined the first part of my conversation on the subject with ChatGPT – a so-called “large language model” AI that has made recent headlines. After a general introduction to the idea, I asked ChatGPT about the benefits of AI […]
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As lenders face increasing scrutiny from the regulatory and enforcement agencies with regard to fair lending in general, and redlining in particular, institutions are searching for ways to mitigate these risks. Why Correcting a Problem is So Hard Fair lending risk management now demands a data-centered strategy, as the focal point of a redlining examination, […]
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Artificial Intelligence, or AI (also referred to as “machine learning”), is here to stay. The financial industry is already inundated with companies offering solutions ranging from underwriting models that consider more than a thousand different data points on each loan application to pricing models that maximize profit while reducing risk to AI-driven audio, video, and […]
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In our previous post on the topic of redlining, we discussed how redlining is an issue that can have serious consequences for banks that do not adequately manage these risks. However, detecting and correcting redlining issues can be complex and nuanced, which is why it’s important to be proactive in addressing these and other fair […]
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Financial institutions are under constant and increasing scrutiny from regulators to manage fair lending risk and ensure compliance with fair lending laws. In this context, conducting fair lending risk assessments is paramount for risk managers who are aiming to not only meet legal requirements, but also promote positive customer outcomes and avoid appearances of practices […]
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You know the importance of ensuring compliance with fair lending regulations. But have you considered the dangers of redlining specifically and completely? Redlining Defined Redlining is the practice of denying or limiting financial services to certain neighborhoods or areas, often based on factors such as race, ethnicity, or income level. While it is illegal, redlining […]
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As we move out of the holiday season and prepare for the new year, we wanted to take a moment and remind you of (4) HIGHLY critical issues at our doorsteps affecting lending compliance. We provide a brief summary of each of these with associated Action Items. Evaluation of the Impact of 2020 Census Changes […]
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You are no doubt aware of the significant changes with the implementation of the Current Expected Credit Loss (CECL) accounting standard. CECL represents a major shift in the way that financial institutions have historically estimated and set aside funds for credit losses on loans and other financial instruments. The evolving regulatory scrutiny associated with these […]
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Overview Earlier this month, there was a major development that could prove to be very significant in regard to fair lending. On September 1st, the CFPB released its proposed rule regarding small business lending data collection. The rule, mandated under the Dodd-Frank Act, and, if finalized and implemented, will require lenders to collect and report […]
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In early May 2021, the American Bankers Association held their ABA Innovation Expo virtual conference. Two of the sessions presented by Robert Morgan (SVP, Office of Innovation) stood out in highlighting how banks are implementing innovative technology as well as in revealing surprising insights into how fintechs and banks are evolving with digital lending. The […]
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